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By Jessica Hermosa And Johanna
Sisante
Vera Files
First of two parts
While ordinary Filipinos face the
threat of food shortages caused by dwindling agricultural land,
sugar barons in Congress are turning vast properties into
plantations to produce and process biofuels.
One of them, the President’s
brother-in-law, Rep. Ignacio “Iggy” Arroyo, hurdled in March
most government requirements needed to convert his family’s
157-hectare Hacienda Bacan in Isabela, Negros Occidental, into
agro-industrial use, mainly to produce ethanol.
If conversion pushes through,
farmers charged that Arroyo will succeed in evading the
Comprehensive Agrarian Reform Program (CARP), which covers rice,
corn and sugar lands. It will also nullify the claims of 67
farmer-beneficiaries waiting for more than a decade for the
Department of Agrarian Reform to award them Hacienda Bacan. Local
Agrarian Reform officials fear the Hacienda Bacan farmers will
generate protests.
The impending conversion of
Hacienda Bacan not only contradicts policy statements made by
President Gloria Arroyo last week favoring a moratorium on land
conversions to preserve the country’s agricultural economy.
It also shows how the country’s
lawmakers—including a member of the President’s own family—are
making a windfall from crafting laws designed to promote their own
business interests.
Rep. Arroyo declined to be
interviewed for this report. His office said the land use conversion
issue “doesn’t have any relevance” to the Biofuels Act.
His office also said the
congressman, currently the chairman of the House Committee on
Natural Resources, is committed to “environmental protection”
and has even begun working on a climate change bill after attending
the climate change summit in Bali, Indonesia, in December.
In the 13th Congress, Rep. Arroyo
co-authored Republic Act 9367, or the Biofuels Act of 2006, along
with then Negros Oriental Rep. Herminio Teves, and former Bukidnon
representative now Sen. Juan Miguel Zubiri. They and eight other
co-authors in the House and Senate and their families own
agricultural lands that can or will provide feedstock for biofuel
production.
Biofuels are liquid fuel produced
by mixing fossil fuel with oil derived from biomass like sugar,
coconut and jatropha. Although there have been studies questioning
their overall environmental and economic impact, biofuels are
expected to help countries attain energy and economic independence.
Teves, whose term in Congress
ended last year, is already planting jatropha for biodiesel on
10,000 hectares of land in Negros Oriental and has even constructed
a jatropha plant that will be operational by 2009.
Meanwhile, Zubiri’s father,
former Bukidnon congressman now Gov. Jose Zubiri, has been the
president of the Confederation of Sugar Producers Association since
September 1, 2006.
The elder Zubiri was once
executive vice-president of the Bukidnon Sugar Milling Co., which,
Senator Zubiri said in a May 2006 news report, will tie up with
Bronzeoak Philippines to build an ethanol plant in Bukidnon. Senator
Zubiri himself still owns at least eight hectares of sugar land in
Maramag, Bukidnon.
When he was first elected to the
House of Representatives, Rep. Iggy Arroyo filed the Fuel Ethanol
Act of 2004, consolidated along with other bills to become the
Biofuels Act. He is chairman of Rivulet Agro Industrial Corp., which
owns Hacienda Bacan. Rep. Arroyo, however, lists neither Rivulet nor
Hacienda Bacan in his 2004 to 2006 statements of assets, liabilities
and net worth he is mandated to file as a government official.
The Arroyos own about 500
hectares of land in Negros Occidental. These include Haciendas Bacan,
Grande, Fallacon, and Manolita, according to a report by the
Department of Agrarian Reform. Bacan and Grande, in particular, are
sugar plantations whose ownership has been hotly contested by
various farmers’ groups.
Documents show Hacienda Bacan,
which has belonged to the Arroyo family for decades, as being
registered to Rivulet now chaired by Rep. Arroyo. Task Force Mapalad,
a nationwide alliance of about 25,000 farmers seeking land reform,
said, however, President Arroyo’s husband, Jose Miguel “Mike”
Arroyo, actually owns Hacienda Bacan.
“Alam naman natin na kay Gloria
Macapagal-Arroyo yung lupa [We know that the land is owned by Gloria
Macapagal-Arroyo],” said Ricky Celis, one of the 67 farmers
claiming the land under CARP. “Talagang ayaw nilang bitiwan ‘to
[They certainly won’t let go of the land].”
Mortgaged several times, Hacienda
Bacan ran up millions of pesos in unpaid taxes to the municipal
government and became a delinquent property that was auctioned off
in April 1994 for P176.7 million. A certification of sale of the
property issued by the office of the Isabela treasurer states it was
sold to Jose Miguel Arroyo married to Gloria Arroyo. Mr. Arroyo’s
ownership of the property, however, was not annotated at the back of
the land title.
Amid calls to put the hacienda
under the agrarian reform program when Mrs. Arroyo became president
in 2001, Ignacio Arroyo that same year offered the property under
the voluntary offer to sell scheme of CARP to get a higher
valuation.
The path toward converting the
Arroyo sugar plantation began in October 2005 when the Isabela
municipal council reclassified Hacienda Bacan from agricultural to
agro-industrial land under a six-year comprehensive land use plan it
approved through a resolution.
The land-use plan, which spans
from 2005 to 2010, was upheld by the provincial council in December
that year.
Despite Hacienda Bacan’s
reclassification, Agrarian Reform provincial officer Teresita Depeńoso
said Rep. Arroyo still has to apply for land use conversion with the
DAR before he can put up an ethanol plant. He has lost no time in
doing so.
On February 14, 2007, just a
month after President Arroyo signed the Biofuels Act into law,
Rivulet sent DAR-Negros Occidental advance copies of the application
for conversion of Hacienda Bacan into industrial land.
In January this year, it
installed eight billboards in Isabela town notifying the public of
its intention to apply for land conversion with the Agrarian Reform
department.
The DAR office in Isabela posted
on March 3 a notice of Rivulet’s land use conversion application
and issued just two weeks ago a certification of the company’s
application.
The last step for Rep. Arroyo is
to now file these and other documents with the DAR central office,
in particular the Center for Land Use Policy, Planning, and
Implementation, to get his application processed.
DAR municipal agrarian reform
officer Jose Defińo said formal protests, if any are filed, may
stall approval of Rivulet’s application. “Siguradong marami ang
mag- protest, mga members ng Task Force Mapalad [Many are expected
to protest, especially Task Force Mapalad members],” he said.
Reclassifying and converting
Hacienda Bacan to agro-industrial land will exempt it from CARP
distribution because Republic Act 6657 or the Comprehensive Agrarian
Reform Law only provides for the distribution of agricultural land
not classified as mineral, forest, residential, commercial or
industrial land to farmers.
The 20-year-old CARP will expire
on June 10 this year. Task Force Mapalad and the Catholic prelates
are among the groups seeking an extension of the program.
Agrarian reform lawyer and former
Agrarian Reform Undersecretary Gil de los Reyes said that while the
law allows the Arroyos to change their land use to agro-industrial
for an ethanol plant, only the area occupied by the plant should be
reclassified.
“No factory exists that will
occupy the entire 300 hectares. At the most, what will you have
[are] 10 [to] 20 hectares that will be converted from agricultural
to non-agricultural,” he said.
If it pushes through, the ethanol
plant will bring a windfall of benefits for the Arroyos. A
100,000-liter capacity ethanol plant can make at least P3.2 million
if ethanol sells at a profitable benchmark of P32 to P35 a liter
based on estimates of the Sugar Regulatory Administration (SRA).
Even without an ethanol plant,
Arroyo stands to gain more than P10 million annually if sugarcane
planted in Hacienda Bacan is sold for ethanol production. The
regulatory body estimates that sugar landowners can expect P65,000
annually for every hectare.
The huge profits to be reaped
from biofuels are an incentive for landowners like former
congressman and Biofuels Act co-author Herminio Teves who has been
growing jatropha trees on 10,000 hectares of leased hillsides in
Tamlang Valley, a 24,000-hectare area straddling the municipalities
of Valencia, Siaton, and Sta. Catalina in Negros Oriental, since
last year. His biodiesel plant is set to start operations in 2009.
Jatropha seeds contain oil that
may be processed into biodiesel.
“I leased a denuded area,
mostly hills that cannot be plowed by tractor or even by carabao but
can still be planted by jatropha,” the 89-year-old Teves said in
an interview, leaning casually on his high-backed swivel chair.
Despite having ended his term as
Negros Oriental Third District representative in May 2007, he still
occupies Room S-119 of the House of Representatives, now the office
of his nephew, Rep. Henry Pryde Teves.
Jatropha production gradually
increases, said the elder Teves who explained that 2,000 trees per
hectare can be planted one year and 4,000 the next. He said jatropha
production has opened up jobs for many residents of Tamlang Valley,
adding that he offers profit sharing to employees.
He expects to harvest 10,000
kilos of seeds per hectare after four years. About 3.5 kilos of
seeds can produce a liter of oil, which, he said, is “similar to
bunker oil.”
However, agriculture experts from
the University of the Philippines-Los Bańos have found in a January
2007 study that jatropha only becomes a practical biodiesel
feedstock if seeds yield at least 34-percent oil content.
The local variety, however,
yields less than the practical standard. “Only 28 [percent] to 32
percent oil is said to be extractable,” experts said.
This does not deter Teves from
pursuing the biodiesel business. Now that his jatropha project is
underway, he said he is “in no hurry” to sell the seeds as local
and foreign investors are interested in buying them.
Republic Act 9367 has no
provision mandating local biofuel producers to supply the local
market first before exporting their products. Hence, biofuel
producers can choose to supply their product to higher-paying
foreigners.
In fact, Teves plans to sell to
the more lucrative foreign market. “The PNOC [Philippine National
Oil Co.] and the oil companies here already want to sign an
agreement with me. But I’m not in a hurry because I know there are
foreign companies willing to buy,” he said.
He added that China and Japan are
“very, very interested” to buy jatropha to produce biodiesel.
Minutes of the bicameral
conference committee that fashioned the final version of the
Biofuels Act reveal that Teves was apparently eyeing the foreign
market even before the law was passed.
In one of the rare moments that
he spoke before the committee, he asked whether producers could sell
abroad if local companies can’t keep up with world prices.
“So it’s not mandatory that a
producer will have to sell to the local [market] if the price abroad
will be higher?” he asked, to which then Senate Energy Committee
Chairman Aquilino Pimentel replied that there was no such provision
in the proposed law.
Teves’ statement of assets and
liabilities show that he acquired his first agricultural land in
Sibulan, Negros Oriental, in 1950, and later became the managing
director of Tolong Sugar Milling in Sta. Catalina, Negros Oriental.
Today, his firm, Herminio Teves
and Co., which will finance his new jatropha processing plant,
manages his sugar lands alongside rice and corn plantations, pig
farms, and subdivisions, mostly located in Tayawan, Sta. Catalina,
and Bayawan.
As of December 31, 2006, while
the then biofuels bill he co-authored was awaiting the President’s
approval, his sugar lands were collectively worth P11 million.
To be continued
VERA Files is written by
veteran journalists taking a deeper look into current issues. Vera
is Latin for “true.”
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